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How to live well on 'nothing a year' - Obeids' financial miracle

Kate McClymont

In contention ... Obeid had been ordered to give the City of Sydney $12 million for selling the council's 'SmartPoles' overseas in breach of a licensing agreement.

MOSES OBEID is a miracle of financial management. Despite having a taxable income of $100,000 a year, and his wife $80,000, the pair live a sumptuous lifestyle, drive his and hers Land Rovers, employ a maid and somehow meet their annual mortgage payments of $210,000 on their $4.5 million mansion.

Mr Obeid, 43, the son of the controversial former Labor powerbroker Eddie Obeid, told the Court of Appeal he could not pay the $12 million he had been ordered to give the City of Sydney for selling the council's SmartPoles overseas in breach of a licensing agreement.

Instead, he wanted the court to put the $12 million payment on hold while he appealed against the earlier judgment of a lower court.

Moses Obeid ... ''living very well''.

In refusing Mr Obeid's application yesterday, Justice Peter Young said he could have ''very little confidence'' in the evidence of Mr Obeid and his brother Paul and noted that the Obeids appeared to exemplify the doctrine: ''How to live well on nothing a year'' from William Thackeray's classic novel Vanity Fair.

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The Obeids produced 10 lever-arch folders of figures, including reports from accountants, to prove Moses Obeid did not have any assets or the means to pay the $12 million.

But Alan Sullivan, QC, for the City of Sydney, identified a complex series of trusts controlled by the family through which millions of dollars had flowed for the benefit of Mr Obeid and his siblings. Mr Sullivan said the trusts had provided Mr Obeid's wife, Nicole, with $2 million to buy the family home, had made every mortgage payment on the house and, in the past two years, had provided Mr Obeid with more than $800,000 to support his lifestyle.

''Did you make any reference in either of your affidavits to the fact that the vast bulk of your living expenses are paid by the trust?'' asked Mr Sullivan.

''I don't, I don't think so,'' Mr Obeid said.

Mr Sullivan accused Mr Obeid of giving false information to the Tax Office, the bank and the court about his financial situation.

He suggested to Mr Obeid that ''the way that the family trust is set up, they're done for two reasons aren't they? All this intermeshing complex trust arrangement - one is [to] minimise tax and secondly is to make it as hard as possible for creditors to get their hands on funds, isn't it?''

''That is rubbish, sir,'' Mr Obeid said.

In dismissing Mr Obeid's application, Justice Young said the material before the court showed that although Mr and Mrs Obeid had few personal assets and limited income, they were ''living very well indeed''.

''They were living in a house in a superior suburb [Vaucluse]
which Mrs Obeid acquired for $4.5 million in 2010,'' he said.

The $2 million the Obeid family trust gave Mrs Obeid to buy the house was a gift, the bank was told, but the court heard it was a loan. The judge also noted that the family trust ''was also kind enough to provide sufficient monies for the Obeids to have a maid''.

Justice Young said the way the Obeid family fortunes were structured, he was not convinced Mr Obeid would not be able to find $12 million to pay the City of Sydney.

Yesterday, Mr Obeid's lawyers issued a statement saying they remained ''confident that Moses Obeid's appeal'' against the original judgment still had ''strong prospects of success''. There was no mention of the bankruptcy proceedings against Mr Obeid, which the council now intends to forge ahead with.